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Question: My understanding is rental
vacancies are decreasing and rental rates
are increasing. I’ve also heard that housing
prices have hit bottom,
are starting to increase
and interest rates are at
60-year lows. Is it better
to rent or own? You are correct that
vacancies are very low
and that will continue
to impact rental rates.
These factors are driven
by the number of people
who have lost homes or can’t purchase homes
given the tighter lending environment. You are also correct that housing prices in
many areas of Colorado are starting to show
month-to-month and year-over-year increases
as inventory of homes available for sale has
dropped from about 25,000 to around 10,000.
And interest rates, driven by Federal Reserve
efforts, a sluggish economy and uncertainty in
Europe, are at or near 60-year lows. Given this environment, the mathematics
are in favor of purchasing. If someone rented
a home today at $1,200 per month and rent
increases by 3 percent per year, a person would
spend over $680,000 for housing over 30 years
and own nothing. A person who purchases a home for $200,000
today with a 30-year fixed mortgage would
have payments of about $1,200 per month,
which may be tax deductible, and except for
increases in taxes and insurance, would remain
constant for 30 years. Payments over the 30 years would probably be
less than $500,000, resulting in savings of over
$180,000 compared to renting. And that house,
if it appreciated at 3 percent per year, would
be worth $485,000. Total difference – over
$665,000 in favor of owning. If you’re looking to purchase or refinance, seek
an experienced, trustworthy, financially savvy
lender you can meet face-to-face who has
access to the full spectrum of loan programs.
Work with them to select the proper loan program
and have them customize the loan to best
suit your needs. For more information on how you can purchase
or refinance a home, please contact
Randy Spierings, CPA with over 30 years experience,
branch manager for Primary Residential
Mortgage Inc. at 303-256-5748 or rspierings@
primeres.com.
by the Better Business Bureau and winner of
multiple Gold Star awards. They are located at
9800 Mt. Pyramid Court, No. 400 in Englewood.
They offer a 100-percent satisfaction
guarantee and will give you $500 at closing if
they don’t meet or exceed your expectations.
